Job growth in 2012 best in seven years

Let's be honest. Much of what serves as economic analysis these days doesn't sound much better than the football game second-guessing you witnessed during this past weekend's Super Bowl broadcast.

For many reasons, economic analysis is far too frequently handled like a sporting event. Short-term trends, especially from data not built for micro over-analysis, becomes overstated. Plus, pressures from media competitiveness to political agendas often turn depictions of minor short-run gyrations into seemingly full-scale business cycle turning points.

In hindsight, the presidential campaign focus on month-to-month changes made the news coverage of the trends – as well as the so-called experts quoted within that content – look silly.

Worse, I found it interesting that there was little coverage last week to a major revision to the 2012 job counts that drew so much attention during the presidential campaign.

These revisions are not part of any grand conspiracy; rather they are an annual event by government job counters who are turning their monthly job estimates into firmer data sets as more detailed information becomes known.

So what did the job trackers – and we the people – learn about 2012, now that the data has been freshened up?

Last year was even better for the job count than previously noted. Federal job counters found an additional 335,000 jobs being created in 2012 vs. what was previously known. That made 2012, interestingly, the best year for job growth since 2005. That certainly wasn't the kind of language used about the job market during the presidential campaign.

I know more than a few of you out there will question even the revised figures, claiming the revision is some sort of government conspiracy to cover up purported economic damage created by the current administration or other political forces.

But if these federal job counters were part of a grand cover-up of job losses, why did they revise upward the 2012 job count by so much? Or why did they reveal the biggest monthly revision was for the November report? If somebody was cooking the books, wouldn't they put those jobs into the public reports
before the election?

Others will note that the current job recovery has yet to replace all the jobs lost during the ugly economic downturn of 2008 and 2009. I cannot argue with that fact.

My trusty spreadsheet offers one explanation.

The Great Recession cost the American economy 8.67 million jobs in two years, when you look at the yearly data. The ongoing job recovery has replaced just 5.3 million of those lost jobs in the past three years.

Since World War II, it has never taken more than three years (and then only once) to replace jobs lost in a downturn. So, by this metric, this job recovery looks limp.

Please note the scale of recent job losses. Before 2008-09, there were 13 years since 1946 with shrinkage in U.S. jobs. Collectively in those 13 years, a total of 9.76 million jobs were lost. Put that sum into the Great Recession perspective and you see how tough it is to replace 8.67 million jobs lost in only two years.

That kind of striking economic perspective isn't found when the economic debate is over minor month-to-month fluctuations.

It's much like trying to put a quarterback's career into historical perspective based on a few minutes of one football game.